New Child Credit-State TANF Match (language only)

Item 399 #1c

Language
Page 240, after line 19, insert:
"F.1. As a condition of this appropriation, the Department of Social Services shall amend the Temporary Assistance for Needy Families (TANF) state plan by July 1, 1998, to establish a separate financial assistance program, the Virginia Earned Income Tax Credit for Low-Income Families with Children, pursuant to House Bill 848 of the 1998 Session.
2.  The Department of Social Services shall provide amendments to the state TANF plan to the Chairmen of the House Appropriations and Senate Finance Committees at least thirty days prior to submission of the amended TANF plan to the federal Department of Health and Human Services.
3.  Upon acceptance of the State plan amendment by the United States Department of Health and Human Services, the Department of Planning and Budget shall unallot an amount estimated at $20,400,000 the first year and $15,200,000 the second year from the general fund appropriation in this item for reversion to the general fund of the state treasury on June 30 of each year.  This unallotment action represents the estimated amount of financial assistance provided to families with incomes at or below the federal poverty level, in the form of child tax credits eligible under federal regulation to be counted toward the TANF Maintenance of Effort (MOE) requirement.  Notwithstanding the amounts in paragraph A of this item, any amount actually reverted to the general fund of the state treasury from this item shall be replaced by federal TANF block grant funds.  The Department of Planning and Budget shall increase the federal appropriation in this item as needed to effect the purposes of this paragraph.  Such administrative appropriation increase shall not be subject to the limitations of §4.105.b. of this act.
4. On or before June 15 of each year, if the Department of Social Services (DSS) and the Department of Planning and Budget (DPB) agree that any portion of the unallotted amount cannot be replaced by documented tax credits in fulfillment of the TANF MOE requirement, DPB shall allot that portion for MOE spending.  In fulfilling the provisions of this paragraph, DSS and DPB shall take care not to jeopardize the Commonwealth's compliance with federal requirements.
5. By October 31, 1999, DSS and the Department of Taxation shall report to the Governor and the Chairmen of the House Appropriations, House Finance, and Senate Finance Committees the amount of tax credits claimed under the provisions of House Bill 848 and the amount of tax credits reported to the federal government in fulfillment of the TANF MOE requirement during the preceding state fiscal year.  The report shall include, but not be limited to, progress in implementing the intent of this paragraph and suggestions for program modifications."

Explanation
(This amendment substitutes federal block grant funds (TANF) for general fund appropriations used to pay welfare benefits. The general fund savings would be used to offset the cost of House Bill 848. That bill would provide financial assistance in the form of a tax credit, up to the amount of the Virginia tax liability, to families with children and incomes below the federal poverty level. A companion amendment to Item 409 reduces the projected unspent balance in the federal TANF grant by an equal amount.)